Here is why you need to know the money factor buyers: here is an example you lease a car that cost $25,000 the residual value is $12,500 term is 36 Months money factor is .0019 your monthly payment is $420.66. Now the same lease with a money factor of .0025 gives you a monthly payment of $440.97 $440.97 - $420.66 = $20.31 x 36 months = $731.16 more you paid, because of the higher money factor. Buyers Beware, when someone says money factor is no big deal !!!!!!!!
EXACTLY. This guy is full of it when he said don't negotiate it. That's exactly what you do or else just give the stealership all your hard earned money. And you are correct Spinrod Johannsen as the money factor is indeed the interest rate for a lease.
Are you saying that the bottom line monthly that is on the contract says 420 but then your paying 440??? If not and I would assume the person is signing the lease because they are happy with the monthly they are paying...WHY WOULD THEY CARE ABOUT THE MONEY FACTOR??? Like, I f I know Im getting a good deal on monthly payments...Why would I care if they are getting a good cut??? If in the end I am also getting a good deal from incentives etc....Its not exactly difficult to look up online what a reasonable lease per month is on any vehicle out there with the internet....So if they are giving me a better offer then the avg. Why wouldnt I be happy for them if they are making some good $$ from the deal?? Maybe Im misunderstanding....But it seems like you have some sort of "They are the enemy" mentality....Like they arent a business and shouldnt make $$ or something lol.
service contracts are a scam especially on a lease!!! the car comes with a factory warranty that will cover the car typically 3 years 36000 miles. stay away from service contracts
@@ChevyDude if it's not a scam, why don't they show the money factor on the lease agreement. Never mind the grocery store we are talking hundreds of dollars over the lease term. (Buyers Beware)
@@ChevyDude Grocery stores have expenses too and want to make a profit. Manufacturers clamor and are willing to pay big bucks to get on the shelf. It is also smart business to mark up healthy ' essential' foods like fruits and veggies.
Your videos are quite informative. I went into a local Chevy Dealership looking to make a purchase on a Tahoe Premier RST 4x4. Long story short, I silently stood up and began to walk out as I was presented with the first number, which was about $2500 over MSRP. I could see that this “manager” and I were not going to easily come to an agreement, especially when I had printed the internet listing, which was about $8500 below MSRP. This is th dealership that my employer had gotten ALL of the fleet vehicles through, at least up to this point. It’s a shame they weren’t willing to be smart about this. The General Manager called me 2 days ago and basically begged me back in for a second try. I guess the cancellation of a corporate order on 130-160 new vehicles per year (rotation time) opened a few eyes around there.
I don't agree with you saying just pay the money factor rate the dealer is charging, when I was looking to lease, a dealership wanted to charge me a money factor way higher than a new car interest rate. I walked out of the dealership knowing they are crooks. I went to another dearlership and received a money factor below new car interest rates. Buyers do your own research.
@@huydo1993 Money factor isn't negotiable with some manufacturers. It all depends on your credit, money down, 1 pay(Lease) and security deposits help to reduce the money factor.
As a women who knows nothing about cars, thank you for being honest and teaching me about any potential hidden fees. Leasing for the first time..I feel so naive
I agree i always want to know money factor x 2400 for interest plus never buy service contracts or key fees from any dealer,the money factor can be huge
To find the right money factor, go to the Edmunds forums. If the dealer marks up the money factor even though you have good credit, haggle for a bigger discount
This was extremely helpful. My lease ends in a few months, and the price of the car is higher than the residual value, so I am doing as much research as possible.
@@crispcarguru303 Is it really that easy??? I know trying to get money back when leasing/renting an apartment is a nightmare.... even when you do everything perfectly...
@@Izzywizzy74 As long as the vehicle isn't too beat up. They usually will charge you later on once an appraiser looks at the vehicle. If you trade-in or sell the vehicle in later(Equity position) that's not technically a a lease return and you don't really have to worry about damage at all.
When visiting a car dealer for the purpose of leasing, ask them about the money factor on their leases. It is not something that is routinely discussed in lease transactions because most customers don’t know to ask. You cannot know in advance what lease money factor will be used before you lease unless you ask. In fact, money factor is not even disclosed in car lease contracts. It’s not required by law, as APR interest rate is in loan contracts. If you don’t ask, you’ll never know. If a dealer refuses to disclose this important information to you, find another dealer.
I leased a car one time.. Felt like a fool after paying monthly payments for 3 years and just license plates to show for it, I never planned on buying it out when I purchased it, but it still stung in the end. Now I finance a car so I can enjoy it when the payments are done.
Except ur payments are much more and ur responsible for fixing a vehicle before u even own it. I’m leasing cause the price was literally more than half off, the residual value will have me 3 grand up by the time my lease is up and I don’t have to worry about maintaining anything. It’ll be under warranty the whole time. Cars also rust like crazy where I’m at so by the time ur down paying off a 6-7 year vehicle they’re usually in horrible condition and you don’t get any new safety or technology features.
Thanks for this rundown. Just did a new lease, and thought I got a hell of a deal until I got home and saw almost $8k in rental fees. Floored that your contract shows $300! Will be refinancing shortly.
Good info, but everyone should at least research what the residual and money factors should be. Definitely DO NOT just let the dealer make money off the money factor, it could be a huge payment if you don't know what it should be.
I would love more videos with info on leasing, I am interested in leasing as I feel it might be the only way I would ever be able to experience driving a new car
Your video helped a great deal. My car cost 32, 460. I received 2000.00 in rebates and cash credits. I noticed that the cost of my car was written in section A. as 35,436.50. Please let me know if I am wrong. I believe that they charged me the wrong price for my lease. Your help is greatly appreciated.
@@ChevyDude The mere fact that you are employed by a dealership tells us everything we need to know about you. Get a real job-because DISRUPTION is finally coming to this pathetic industry filled with degenerates like you who "pretend" to inform the customer to shady sales techniques.
@@bikes7777 completely moronic statement. I’m 20 and could buy a new vehicle in cash, or I could build credit keep 30k in an investment account and profit. You never want to have all ur money into a depreciating asset. As soon as you drive it off the lot ur down like 15%.
@@Usicky12 you're 20 so I can understand your lack of knowledge. Buying a 30k vehicle is what is moronic. If you have 30k in savings, keep it there. Buy a 2 or 3k car and repair as needed. Financing a 30k car would be idiotic, as would buy it with cash.
@@Usicky12 BTW my credit score is over 800, with no credit cards or car loans. You don't need to finance anything to "build credit". That is just a myth that banks promote.
@@bikes7777 I work 8-10 hrs a day so I just said fuck it and leased. 285/mo and I don’t have to worry about anything. I even got rid of cable and a few other things to pay for it. I just pay the payment and I know I’ll always have a working vehicle. I did the whole 07 thing and had my mechanic fix it and tried to be cheap and it was a nightmare. I’m also going up to be up 3k by the time I’m done paying it, if I decide to buy it and sell.
My question is if you go into a dealership with already pre approved/approved from you bank or credit union. Will you still get warranty on services? Etc.
When you find out what money factor is being used in your lease you can convert it to interest rate (multiply money factor by 2400) and compare it to national average auto loan rates from Bankrate.com. You should expect to pay about the same rate for your lease. If you have a poor credit score, you may pay a higher money factor, just as you would pay a higher interest rate on a loan.
Just leased Toyota Rav 4 Hybrid xse. Car sticker is $39300.00. Residual came in at $25800.00 $411.00 monthly payments x39 months. First payment was $1600.00 plus the $411.00. The $1600.00 represented doc fees. Plus $1k down. How did we do?? Thanks
I don't know about your area, but in NE OH lease payments are lower, yearly mileage allowance higher for Toyota and Honda models compared to many GM models. The fee for going over the allowed yearly mileage is lower as well.
What is the best way to negotiate the Purchase Option at the End of Lease amount? I've leased several cars and I've always privately sold them before the lease terminates, and always more than the residual amount. Also, why would anyone buy a Service Contract on a leased vehicle? Please give me a good explanation because I'm not convinced they're necessary esp since most cars are under full warranty for 36 months and the length of the lease term. You do great videos, I've learned a bunch from them. Thank you👍🏽
So on a lease contract its added upfront about .25 cents extra per mile over the 12,000 miles per year. What happens if the opposite happens? What if after 36 months you mileage was only 26,000 miles instead of the 36,000 miles you were allowed? Does that benefit you in anyway, whether you are buying out or leasing a new car?
Hey. So I am a Ford guy. I have leased my last 3 Fords. I am kind of getting sick of the customer service at my ford dealership. I am looking to make a change. That’s right to Chevy. I leased an F-150 as my last truck and because of a job change I am looking to get into something smaller. Can you do a video on the 2019 Chevy blazer?
I say this with respect but don’t listen to this guy. The money factor is an important tidbit to know when leasing the car. If they don’t show you the money factor at the dealership walk out and tell them to have a nice day. If they tell you the money factor (and they should) take that number and multiply it by 2400. Example: .0015 x 2400=3.6%. Assuming you have excellent credit your money factor should be at or near new car finance rates. Most importantly though if you want to lower your monthly lease payments focus on negotiating the price of the car just like you would as if you were purchasing it. Happy leasing…
How many miles though? I got an offer for the same truck 15k miles at 310. But I ended up going with a Colorado WT for 275 cause I’m a broke college student lol. 0 down aswell
@@dash4786 that’s an alright deal, you didn’t do bad. But not amazing. You shoulda squeezed atleast 15k miles outta them. My dads paying 350/mo 0 down on a 1500 Silverado which had an MSRP of 44k. Atleast where I live you coulda got it for around 310/mo
Interested too as I have hit 36k miles in 21st month of 3 year/36k mileage lease. Not sure whether to just pay mileage at end of the lease, purchase car or see about turning it in earlier and getting new lease or purchase from the dealer.
Can you do an example of a contract that includes a GMS discount (equals $5,710.32), 1500 rebate, zero money down, 36 month term, 12 K miles/year, MSRP = $63,365.00, money factor = 0.00014; residual % = 56%, acquisition fee = $650.00 and doc fee = $250.00
Excellent video, I’ve always leased cars because I feel that getting a new car every 3 years or so is worth it. But I do carry gap insurance on our leased vehicle. I will definitely call Chrysler Capital and ask if gap insurance is included in our payment. We already pay way to much for insurance in Michigan so anything I can save is a blessing. Thanks Chevy dude appreciate your help.
Richard Rybarczyk I added gap through my car insurance too because of not knowing for sure through Chrysler Capital if it’s included or not. Smh... I’m in Michigan as well. And as u prolly know we have the highest insurance rates, so not having to pay for something that should be included in the lease would be great.
Went to BMW to lease a 2020 X6. Salesman told me 10k for 12 mos with 9000 down. I laugh and walked out. Now i see my instincts were right. $4500 down 12k for 36 mos or i walk...
Can you please show how to read a buying contract.......I have an apontment to order/buy a Infinity Q60 red sport 400 in July. CAR BUYING contracts. How to read them so you don't get SCAMMED into paying too much.
What’s the best way to know the base money factor or to know if they are marking up rent charge? Also is there a limit ethically that they can mark up the rent charge?
Usually 1 pt so if it's .00026 the max markup usually is .00126. depending on the vehicle it could equal 800 to say 1300. Let me guess, you don't want the dealer to make that either..lol
Another great video. Have another video idea. Pros and con of Special order vs buying off the lot. I’m about 3 months or less from buying my wife a new car. She wants a Forrester. Been looking locally in Cincinnati as well as Bachman. No one has any touring models available and we were pushed towards a special order at a local dealership. Not sure how special order affect dealer allocations and their willingness to deal on special orders.
Unfortunately, the default assumption is that a dealer will cheat and scam you. That's the safe assumption to make when you work with a dealership. What can you do. That's the reputation they earned and it's well deserved. Good guys like Chevy Dude and the myriad of ex-dealers who are trying to help you like Your Auto Advocate, Kevin Hunter, Ari Janisien, and Not Wanting to Live, are few and far in between.
Not for a lease, only to buy. Honestly, if you tell the dealer your exact interest rate and terms from your bank, they can beat it because they have so many banks to shop the loan to for a better deal.
Lol 2300 on a lease for a service contract? Who is dumb enough to buy that 🤣🤣 under warranty the whole time. Ps I’m a finance manager and if I could actually sell that I would but that’s dumb. Wear and tear for 600 is more like it
The last vehicle I leased was a Chevy 1500. They had the residual value super low, which made my payments pretty high. I went back and forth with the sales manager for a few minutes and they raised the residual a couple thousand dollars. That reduced my payment, but I have no idea what it did for them.
That 25c per mile is pretty crazy. I don't know how it depreciated $13,756 in this video, that's a whopping 68% depreciation for what seems to be an economy car, and they don't depreciate that fast, but he did say these are sample numbers he made up so whatever. On a $20k car, assuming it depreciates to $10k within 3 years and driven 36,000 miles. If I drive an extra 10,000 miles, that would equate to an extra $2,500 charge that I would have to pay upon returning the leased vehicle. Are you saying that what is now a $10k car after 3 years is now worth just $7,500 because it has 46,000 miles on the odometer as oppose to 36,000 miles? That's ridiculous. It's better to just buy the car at lease end, forego the disposition fee of $395 and then sell it myself. Chances are someone looking for a used economy car around $10k will see 36k miles driven or 46k miles driven as roughly the same and is not going to negotiate $2,500 less for that. I'll end up saving roughly $3k by buying the car at lease end and selling privately myself.
I just leased a car and now waiting for the Honda Civic to arrive. Is it weird that the on the buyers order they can’t give me a full breakdown of what my 3k taxes and fees include? I had to pay a lease deposit of 1k first and they said that’s not a down payment is that right??
I put 15 k down on a 2021 bmw m4 comp I only ha e 5800 miles do to go back june 3 what should I do Residual value fifty three thousand but I think my car is worth more than that
Wooow so looks like I was about to get ripped off!! The car I want is closer to $30,000 not this $40,000 and yet they trying to charge me $600 and not the $369 the website says!
@chevydude thank you for these videos, truly a psa, can you explain a little about the contracts and what and how does dealer penetration rates works.? Cause on some of my recent purchases I was able to get service contract cheaper than other...example 2016 purchase a 100k miles for 1900 bucks vs the charger they could only sell to me for 2800 why? Fiance manager said all about penetration rate?
You said you will always have negative equity on a lease......? That’s not true one bit. I’ve been leasing Tacoma’s for the last decade and have never put any money down except for the very first one I leased because of the equity I have had in the vehicles (as much as 4k$) I drive a 42k$ truck for less than 300$ a month for the last 10 years.
you can get the milage changed in the negotiations. I have leased a couple of vehicles in the past. most advertised leases are 10,000 miles per year. you can lease with 12 to 15000 per year but it also changes the payment
Hello quick question - I know end-of-year can be a good time to get deals on BUYING a new car...but does end of year also offer good deals on LEASES? Or are December specials only good for buying?
Mike. If it were not for the engine start stop and the cylinder shutdown deal I would have purchased a Trail Boss from you months ago! I know Trump is rolling back a ton of restrictions and the EPA is cooling it for right now and taking a double look at some things in the automotive industry. I am curious what your feeling is on the idea of no start stop and no cylinder shutdown in GM trucks in the next year or two. I know start stop can be shut off. I think they will both be gone In the 2021 trucks. Do you think I am crazy for that? Do you agree?
Why do you have a service contract on a vehicle that is under factory warranty for the entire term of the lease? that should not be in that contract, a total waste of money.
A question. I own an older leaf out right. Since the leaf is eligible for the Federal tax credit of $7,500 and our local utility has offered rebate of up to $10k off purchase price too. Is there a way to wind up owning the car at the end of the lease. I was thinking of paying a large down but you said if the car is a loss I would lose that money. Can you enlightened me on this.
So this clearly doesn’t list the money factor. Are you required to tell the customer what the money factor is on a lease if they request that information?
